PROPERTY NEWS - The latest Lightstone review of the South African residential property sector gives further evidence that, although it would be premature to talk about a full-on recovery in the residential property market, trading conditions are very definitely improving, says Bill Rawson, Chairman of the Rawson Property Group.
"Lightstone's figures are fairly conservative when compared to those of many of the banks," said Rawson, "but even they are now charting a 6% growth on a national scale. This means that property values are keeping pace with the current inflation rate."
The best recent performance recorded by Lightstone, said Rawson, has taken place in Gauteng where the Ekurhuleni Municipality residential sale prices rose 8% over the last year.
"This is a good indicator," said Rawson, "because property price movements in South Africa are traditionally initiated in Gauteng and then followed several months later in the other provinces."
The area still lagging furthest behind, said Rawson, is the Eastern Cape. Here the Nelson Mandela Bay Municipality prices have shown no increase at all over the last year. This, said Rawson, reflects the poor general economic conditions in that area.
"Certain new Rawson Properties agents, notably Port Elizabeth Elite, serving most of Port Elizabeth," said Rawson, "would almost certainly disagree with the Lightstone figure. We have to accept, however, that the Lightstone survey covers the entire precinct, not just middle class homes."
Rawson pointed out that the growth patterns have also changed radically in the last three to five years.
"In 2007," he said, "the sectional title sector led with a startling growth of ± 15% year-on-year. Now sectional title, with a mere 3,3% growth rate, takes second place to freehold property which is appreciating by 6,3% annually. This may seem to negate the advice given out by several Rawson spokespeople to the effect that investors should be targeting sectional titles. However, most of our spokespeople are referring to the sub-R1 million and affordable sectors. Well positioned sub-R1 million sectional title units such as Rawson Developers' Rondebosch Oaks are appreciating at ± 8% year-on-year, while in the lower priced affordable sector (below R650 000) Lightstone figures show that an annual growth of close on 12% is being achieved."
It is worth noting, said Rawson, that the Lightstone survey shows again that growth in high-value property (estimated at a mere 4,1%) still lags behind that of mid-value homes (5,7%). Surprisingly, however, he said, it should also be noted that in the top sector, the growth has in one year risen from 3,3% to 5,4%, indicating that at last buyers are coming to forward to invest again in more expensive homes.